How the Federal Government Spends $6.7 Trillion

Federal spending is rising faster than tax revenues, generating a massive flow of red ink. Congress has not balanced the budget in more than two decades, and by 2023 it was spending almost $2 trillion more than it was raising in revenues.1 Overspending is pushing costs onto younger generations, undermining economic growth, and sowing the seeds of a financial crisis.2 To tackle the problem, Congress should pursue widespread spending cuts in the $6.7 trillion federal budget. This study explores what spending to cut using data from the US Bureau of Economic Analysis (BEA).3 The government runs thousands of programs in hundreds of agencies, but the BEA data show that all spending is one of five types: transfers (benefit and subsidy payments), aid to the states, purchases, federal worker compensation, and interest on the debt.